Trying to figure out second part **Problem 14-6 (Similar to)****Scenario:**Given the following information, would it be better for Illinois resident Salem Marcos to itemize her sales tax or her state income tax on her federal tax return?- Federal taxable income: $52,400.00- Federal marginal income tax rate: 25%- State taxable income: $39,280.00- State income tax rate: 3%- Total sales tax paid: $1,344.80Assume that Salem has sufficient itemized deductions to choose itemization method over the standard deduction.**Question:**It would be better for Illinois resident Salem Marcos to: [Select best answer below]- A. No difference between the two.- B. Itemize state income tax.- C. Itemize sales tax. ✅**Calculation:**If she makes the effort to track the sales tax she paid, on her federal income taxes Salem Marcos could save $______. (Round to the nearest cent.)**Instructions:**Enter your answer in the answer box and then click Check Answer.

Answered: Given the following information, would…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Trying to figure out second part

**Problem 14-6 (Similar to)**

**Scenario:**

Given the following information, would it be better for Illinois resident Salem Marcos to itemize her sales tax or her state income tax on her federal tax return?

- Federal taxable income: $52,400.00
- Federal marginal income tax rate: 25%
- State taxable income: $39,280.00
- State income tax rate: 3%
- Total sales tax paid: $1,344.80

Assume that Salem has sufficient itemized deductions to choose itemization method over the standard deduction.

**Question:**

It would be better for Illinois resident Salem Marcos to: [Select best answer below]

- A. No difference between the two.
- B. Itemize state income tax.
- C. Itemize sales tax. ✅

**Calculation:**

If she makes the effort to track the sales tax she paid, on her federal income taxes Salem Marcos could save $______. (Round to the nearest cent.)

**Instructions:**

Enter your answer in the answer box and then click Check Answer.

Expert Solution

Step 1

Itemized deductions are expenditures on eligible products, services or adjusted gross income to reduce the tax invoice bill. Tax payers can take either standard deduction or itemized deduction to reduce taxable income on their federal income tax return.

Itemized deductions are listed on Schedule A of Form 1040.

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